Is Paper Currency On It’s Way Out?
Paper money and coins are a form of payment that we all have the option to utilize right along with plastic credit cards and debit banking cards. As the world has become more of a digital domain, the speed of which society is pushing us towards trading digital digits that represent our earnings is changing the way people of all generations and age brackets do business.
Crypto vs. Cash
With the advent and implementation of blockchain and artificial intelligence, will paper and plastic payment get pushed to the side for this new, evolving technology that has led to the emergence of cryptocurrencies? Cryptocurrencies have pushed through and garnered mainstream attending during the last three or four years. The expansion of digital currencies has spread into several banks, like Wells Fargo and JP Morgan. They are developing their own cryptocurrencies into major enterprises.
This all leads to if and when will cryptocurrencies push paper currency all the way out like what we have seen happen in Sweden? Deutsche Bank, as it looks towards 2030, predicts that the current financial system could be overtaken by something like cryptocurrency. The question is, would this mean the end of cash?
The Deutsche Bank report on the future of finance speaks at length about the prospect of cryptocurrencies in the upcoming years between 2020-2030. They speak about the ways in which cryptocurrencies have managed to bring in additions to the global inventory of money but have not been able to completely become a core means of payment, even with their benefits such as speed, security, speed, storage simplicity, and minimal transaction fees. But not everyone has been the full-on digital crossover.
We all know people who prefer paying for things in person instead of digitally. Plus, not everyone is computer-savvy or even can afford digital instruments and equipment.
Obstacles Cryptocurrency Faces
While cash sits in a skeptical spot for the next ten years, there are still a few obstacles that cryptocurrencies have to overcome. They need to become legitimate in the eyes of governments and regulators with a stable price that benefits consumers and businesses alike. They have to enable global usage in the payment market with alliances with stakeholders like Apple Pay, Google Pay, Visa, Mastercard, Amazon, and Walmart.
When it comes to blockchain technology, Walmart is already engaging with it for its supply chains. If these challenges are sorted out, the future of cash is looking quite shaky. But with no physically tangible forms of payment, that would cause our financial system to operate entirely on electricity consumption.
The financial system has to be secure enough to ward stand-up against any kind of electricity shutdowns or cyberattacks. Governments could find themselves having to safely store backups of citizen data in countries other than their own, which would include details of its citizens’ health, population, and business registries.
Central Bank Digital Currencies
In regard to the future of cryptocurrencies, there has been quite a bit of interest over the potential of central banks issuing their own cryptocurrencies that are called Central Bank Digital Currencies or CBDCs. There are many people that believe CBDCs can be regulated and controlled. At the recently concluded World Economic Forum in Davos, a policy toolkit was revealed for the growth of CBDCs. Central banks in England understand that if governance can be acquired and standardized, then digital currencies can emerge more widely. With paper currency being used less and less due to the fears of catching the invisible COVID-19, it might be a really good time to learn how to research crypto coins to get a better understanding of this upcoming currency technology.